The World Gets Flatter

Most people have heard or read about the phenomena described by Thomas Freidman in his well written and recognized book, “The World is Flat”.  He described the changes we saw over the years around the late 90’s and early 2000’s that resulted in some large behomoths like Infosys, TCS, Wipro being formed over the years.  His main theory was that as people become more able to collaborate, compete, and share with others of different cultures, religions, educational backgrounds and languages, it resulted in a shift with newer companies arising and challenging well established companies from the US. I wanted to spend some time exploring the potential that the 3 technological revolutions occuring currently, which I talked about in my previous blog (http://india-tech-trends.blogspot.in/2012/02/best-time-to-graduate-now.html), could have on these large SI’s, similar to the impact they had on the likes of IBM, HP, Accenture etc.

Each of the 3 massive shifts have the potential of enabling smaller companies or even individuals innovating in a manner which could disrupt companies, large and small. Last month, Facebook a company that did not exist 10 years ago, did an IPO, for $105 Billion, after it had purchased Instagram, a company of 13 employees for $1 Billion and hadn’t existed even 2 years ago.  There are numerous such examples around of innovative individuals who are benefiting from the rise of mobile, social, and cloud technologies.

Let’s look at each of them individually.  Obviously, the cloud with its variations and options provide a fantastic proof of that.  An often cited example is the PaaS (Platform as a Service) offerings from Amazon which are probably the fastest way for an enterpreneur to create even a new company and take his quick prototype to trial to an actual product and scale it up over a period of time, depending on the response he or she gets. This, without a major investment on hardware or software, which can typically only be afforded by a larger company.  Imagine the number of newer ideas and companies that can come to the fore – and that too, from around the globe.  No longer can it be restricted to only certain geographies. This wil potentially even challenge the well established leaders from the US or the software giants from India.  Now, a smart individual in Djibouti could take his idea, quickly write a software and have it up and running for his customers from around the globe in days or weeks. 

We have already witnessed a similar phenomena in the mobile world, thanks to the Genius of Steve Jobs and Apple, in the form of the App Store, which allows individuals to write a simple app, and have it up for his or her potential customers – most of whom he does not know about, and they can do this without spending tons of money in marketing and is able to reach up to millions and millions of potentail customers.  We have all heard about lots of stories of young, smart developers, writing up apps and making it big in this space.  This of course, has now been well adopted by Google via the Google Play (recently changed from Market) and Microsoft’s Marketplace. 

The other place where it could impact the larger SI’s is the rage setting in Enterprises to also develop various apps for their employees to make them more productive.  Gone are the days, where enterprises would build or manage large systems like ERP, CRM etc and hence had to rely on the likes of the Infosys' or Wipro's of the world.  Each department or group in the company is turning to small time developers or companies that can develop simple apps for $5K to $10K for them in weeks.  They do not have to only rely on their standard outsourced partners for these. So, even a 1 person developer shop can develop an application instead of a large outsourced partner with 1000’s of developers available at a cheaper rate.

Another potentail implication of these changes, is that we will never again see a trend similar to ERP or SCM or CRM, where a couple of large players practically captured the market and spend tons of effort and energy on building these complex systems which could only be consumed by the large companies.  Only after the trend spread and most larger companies had implemented these systems, would they start thinking of an SMB play, and try and go downmarket.  The initial product was always thougt of and implemented for a large firm.  Salesforce.com, probably was the first one, to build a product for the downmarket, with its simple to use, “No Software”, instant, on-demand solution meant for the SMB and slowly moved up market.  One domain we are already seeing the impact is in the Mobile Device Management space, where these solutions are not only required by large companies, but even the smallest of companies need these solutions to manage the influx of iPhones and iPads into the enterprise.  The adoption rate of mobile devices is equal, if not faster by employees of smaller companies.  The net result is we will never again see the likes of SAP, Oracle, Siebel again in the enterprise space and most of the innovations will come from the smaller, more agile newer startups. 

In terms of the social phenomena helping make similar changes, I’ll revert to some personal examples we have been witnessing locally.  In order to get together people interested in the particular domain of mobile devices, there’s been a creation of facebook group, called the MUG (Mobility Users Group), which is a group of individuals interested in the developments in this space, who come together, virtually and sometimes physically to share learnings, knowledge, and learn from each other.  This is allowing the spread of knowledge easier and not restricted only to folks who could afford or pay for training classes in a particular technology or space. I’m sure these phenomena, like meetup groups (www.meetup.com) are extremely successful across the globe and will only spread the advantages of social networking in bringing more innovations for everyone.

All these are clear indications that the world is getting flatter with these new technological changes and providing the opportunities to even the remotest of individuals in hitherto unknown countries to innovate and have a larger impact on the world.